One Customer, Three Tables

There is a one-line table in the notes to Nexon's fiscal 2025 earnings release: a single customer accounted for ¥94,133 million (US$575 million) of revenue, attributed to the Korea segment. Consolidated revenue for the year was ¥475,102 million (US$2,901 million), so one counterparty supplied 19.8 percent of the company — 94,133 divided by 475,102. The line carries an amount and a segment. In the text we reviewed, it does not carry a name.

The frame first. Nexon (3659) published results for the year ended December 31, 2025 on February 12, 2026; the annual securities report was scheduled for March 24, the day before the general meeting. The company has reported under IFRS since fiscal 2013. Revenue rose 6.5 percent to ¥475,102 million (US$2,901 million). Operating income was ¥124,012 million (US$757 million), down 0.1 percent. Profit attributable to owners fell 31.7 percent to ¥92,052 million (US$562 million).

The release separately describes, in plain terms, a licensing model — a description of how royalties arise, not an identification of the customer, and the disclosure does not connect the two: NEXON Korea Corporation and NEOPLE INC., which develop PC online games, grant distribution rights — for example, in China — to distribution companies outside the group. Once service begins, the group receives a fixed percentage of the service fees the distributor collects from users, as royalty, with payment terms set contract by contract. Nexon sells the right to run the store; someone else runs it, collects from the players, and remits a cut.

The release then takes the same ¥475,102 million (US$2,901 million) and breaks it down by product and service: game billing ¥323,447 million (US$1,975 million), royalty ¥146,931 million (US$897 million), other ¥4,724 million (US$29 million). The three sum to the consolidated total exactly. Royalty, on this cut, is 30.9 percent of everything Nexon booked — 146,931 divided by 475,102.

The royalty line has a history in the same table one release earlier. In the fiscal 2024 earnings release, royalty in fiscal 2023 was ¥110,487 million (US$675 million) against revenue of ¥423,356 million (US$2,585 million) — 26.1 percent, 110,487 divided by 423,356. In fiscal 2024 it was ¥189,415 million (US$1,156 million) against ¥446,211 million (US$2,724 million), or 42.5 percent. That release's table carries both columns; between the two years the share the row represents moved 16.4 points.

It breaks the total down again, by geography — classified, the note says, by where the customer is located: Korea ¥249,973 million (US$1,526 million), China ¥109,513 million (US$669 million), North America and Europe ¥68,582 million (US$419 million), Other ¥33,020 million (US$202 million), Japan ¥14,014 million (US$86 million). The rows again sum to ¥475,102 million (US$2,901 million). On this cut China is 23 percent of the company and the headquarters country is 3 percent.

And a third time, by reportable segment — Japan, Korea, China, North America, and Other. Korea segment revenue was ¥400,657 million (US$2,446 million) with segment profit of ¥132,945 million (US$812 million). The China segment booked ¥1,774 million (US$11 million) of revenue and a segment loss of ¥152 million (US$0.9 million). Japan booked ¥5,509 million (US$34 million), North America ¥28,125 million (US$172 million), Other ¥39,037 million (US$238 million). The five revenues sum to the consolidated ¥475,102 million (US$2,901 million). Three tables, one total.

Now hold the geography against the segments. China the geography: ¥109,513 million (US$669 million). China the segment: ¥1,774 million (US$11 million). The distance between the two rows is ¥107,739 million (US$658 million) — 109,513 minus 1,774. Korea runs the other direction: the segment books ¥400,657 million (US$2,446 million) against ¥249,973 million (US$1,526 million) of revenue from customers located in Korea, which is ¥150,684 million (US$920 million) more.

The two rows were further apart the year before. In fiscal 2024, revenue from customers located in China was ¥164,116 million (US$1,002 million) — the same figure the presentation's prior-year column carries — against a China segment of ¥2,617 million (US$16 million), a distance of ¥161,499 million (US$986 million). The Korea segment booked ¥413,098 million (US$2,522 million) against ¥195,022 million (US$1,191 million) of revenue from customers located in Korea, ¥218,076 million (US$1,331 million) more.

The release resolves this in a single sentence: the Korea segment's revenue includes royalty income from licensing in China at NEOPLE INC., a subsidiary under NEXON Korea Corporation. Royalty on a Chinese license is booked, per that sentence, by a Korean entity. The geography table, per the note in the earnings release, classifies revenue by where the customer is located; the segment table follows the entity that books it. Same money, two addresses. The investor deck's regional table has its own footnote — regions reflect where the revenue originates, not which Nexon entity records it — a different phrase for the sorting rule, and the excerpts we reviewed do not say whether the two phrasings describe the same test.

Go back to the customer note with that in hand. The one customer: ¥94,133 million (US$575 million), Korea segment. The royalty line, company-wide: ¥146,931 million (US$897 million). If every yen of the customer's revenue were royalty, that customer would be 64.1 percent of the royalty line — 94,133 divided by 146,931. The disclosure does not say that. Nothing in the release allocates the customer's revenue between game billing and royalty, and nothing maps it onto a geography row. The segment attribution tells you which entity booked the money; per the release's own sentence about NEOPLE, it does not tell you where the counterparty sits. From these tables, the allocation cannot be done — which is itself information about the tables.

The gap in the note is written into the standard. IFRS 8 paragraph 34 requires an entity whose revenues from a single external customer reach 10 per cent to disclose that fact, the total from each such customer, and the segment reporting it — and states that the entity need not disclose the customer's identity, nor the amount each segment reports from that customer. The tables can carry the size of the dependence without carrying the name.

Where does a name appear? Not in the note. In the investor presentation, in other roles: the constant-currency methodology uses as its worked example "royalty revenues from China Dungeon&Fighter" — a franchise name, not a counterparty. The name Tencent is on two slides. The PC franchise page says the company plans to provide more hyperlocalized content for players in China through its partnership with Tencent; the Korea and China outlook page says the next release of co-developed content with Tencent is scheduled for the first quarter of 2026. Both are statements of plan. Neither carries an amount. And pages 1 through 13 of that deck split revenue into Vertical and Horizontal franchises, with no numeric breakdown by revenue model in those pages. So the note in the earnings release carries an amount and no name; the outlook slide carries a name and no amount. In the documents we reviewed, no single table holds both.

A name does appear against the amount, on another form. Nexon filed its annual securities report for the 24th term with the Kanto Local Finance Bureau on March 24, 2026. In a table of sales results by principal counterparty, the report prints ¥94,133 million (US$575 million) at 19.8 percent of total sales, and states the counterparty as Tencent Holdings Limited and its subsidiaries; the prior-year column of the same table carries ¥143,300 million (US$875 million) at 32.1 percent. The fiscal 2024 earnings release, for its part, put the major-customer note at ¥143,300 million (US$875 million) for that year and ¥80,189 million (US$490 million) for fiscal 2023, each attributed to the Korea segment. Same counterparty line, two documents, two headings.

The presentation also spells out the mechanics of the currency chain. To compute constant currency for the China Dungeon&Fighter royalty, Nexon applies the prior-year quarter's CNY/USD, USD/KRW and KRW/JPY rates — three legs between a renminbi payment and a yen income statement. For Q1 2026 guidance, the assumed rates are stated: 100 KRW at ¥10.77, CNY at ¥22.45, USD at ¥156.78.

What did the China row do in 2025? It fell. In the investor presentation's regional table, revenue originating in China was ¥109,513 million (US$669 million), against ¥164,116 million (US$1,002 million) a year earlier — down 33 percent as reported, 32 percent in constant currency, a decline of ¥54,603 million (US$333 million). In Q4 alone it was ¥16,685 million (US$102 million), down 22 percent. The earnings release — the other document — says the PC version of Dungeon&Fighter in China re-energized player engagement through successful updates, with revenue growing year on year. Both statements can hold, and one page of the release carries both halves. Its fiscal 2025 China row contains PC online revenue of ¥59,283 million (US$362 million), mobile of ¥50,209 million (US$307 million) and ¥21 million (US$0.1 million) of other; the prior-year table printed directly above it on the same page carries PC online ¥56,750 million (US$346 million) and mobile ¥107,362 million (US$655 million) on a China row of ¥164,116 million (US$1,002 million). Between those two columns the PC line rose ¥2,533 million (US$15 million) and the mobile line fell ¥57,153 million (US$349 million). On this cut the decline is the mobile line: the release's sentence is about a PC title, and the presentation's percentage is about a row that carries both platforms at once.

The fiscal 2024 split appears in both releases; the fiscal 2023 column is printed only in the prior year's release. There, revenue from customers located in China was, in fiscal 2023, PC online ¥94,347 million (US$576 million) and mobile ¥6,141 million (US$37 million) on a China row of ¥100,488 million (US$613 million). Between fiscal 2023 and fiscal 2024 the mobile line rose ¥101,221 million (US$618 million) and the PC line fell ¥37,597 million (US$230 million).

Guidance is also a matter of format. Nexon publishes no full-year forecast — it states that one is difficult to compute, citing the growth speed of its core markets, shifts in user preferences, and whether titles become hits — and gives a range for the next quarter only. For Q1 2026: revenue of ¥150,492 million to ¥164,015 million (US$919 million to US$1,001 million), operating income of ¥51,182 million to ¥61,122 million (US$312 million to US$373 million). For fiscal 2026 the company states it cannot reasonably compute even a first-half or full-year figure, so the first quarter is the whole of the guidance.

The quarter arrived. For the three months ended March 31, 2026, reported on May 14, revenue was ¥152,234 million (US$929 million) — inside the ¥150,492 million to ¥164,015 million range. In the presentation's regional table, China was ¥31,393 million (US$192 million) against ¥37,580 million (US$229 million) a year earlier, down 16 percent as reported and 17 percent in constant currency. The quarterly release's China segment was ¥698 million (US$4.3 million); its Korea segment ¥101,769 million (US$621 million), against ¥57,481 million (US$351 million) in the region called Korea — ¥44,288 million (US$270 million) more. The same two addresses, one quarter down. The rates the quarter applied were 100 KRW at ¥10.72, CNY at ¥22.61 and USD at ¥156.86; on China, the deck says the PC version grew year on year while the mobile title declined.

Shareholder arithmetic is more definite. The fiscal 2025 dividend was ¥45 (US$0.27) per share — ¥15 (US$0.09) interim, ¥30 (US$0.18) year-end — and the fiscal 2026 forecast is ¥60 (US$0.37). Total dividends came to ¥35,801 million (US$219 million), a 39.3 percent consolidated payout. The stated policy: return at least 33 percent of the prior year's operating income, excluding one-off items such as impairment losses, with an ROE target of at least 10 percent and, eventually, 15.

On February 12, 2026, the board resolved to cancel 36,487,500 treasury shares — 4.4 percent of shares outstanding as of January 31 — with a cancellation date of February 27, for the stated purpose of capital efficiency and shareholder returns. It followed a year of repurchase activity: during 2025 the company disclosed buyback executions on six dates and new buyback resolutions on two.

Upstream of the register there is also one name. On June 3, 2026, NXC Corporation filed a change report: together with its joint holders, its stake moved from 49.28 percent to 51.29 percent as of May 22, on a reported holding of 406,521,712 shares — NXC itself moving to 31.35 percent, NXMH B.V. to 19.30, Yoo Junghyun to 0.65. The filing summary notes that, under the Financial Instruments and Exchange Act, treasury shares are not counted as shares held; it does not state whether the holders' share count changed from the prior report.

Three weeks after the change report, a third form. On June 22, 2026 Nexon filed an extraordinary report under article 24-5(4) of the Financial Instruments and Exchange Act and article 19(2)(iv) of the disclosure ordinance, recording that NXMH B.V. ceased to be a major shareholder as of June 19, 2026: 1,186,422 voting rights, or 14.99 percent, before; 1,151 voting rights, or 0.01 percent, after. The base is the 7,912,754 voting rights of all shareholders as of March 31, 2026. The report also prints capital of ¥62,319 million (US$380 million) and 793,477,908 shares outstanding at the filing date, and notes that the shareholding figures are recorded on the basis of what the shareholder communicated, the company not having confirmed the beneficial holding.

We tried to go one layer down. NEOPLE INC. — the entity the release names as the recipient of the China licensing royalty — went into the company search on DART, Korea's corporate disclosure system. The result field returned: "조회 결과가 없습니다." No results. Whatever Neople reports on a standalone basis, our search of DART's company lookup did not retrieve it; for a reader of public filings, the consolidated note is where its royalty lives, inside the Korea segment.

The Japanese filing prints one line of the entity's own arithmetic. In the annual securities report's section on affiliated companies, NEOPLE INC. appears among the Korean consolidated subsidiaries whose revenue, net of intra-group sales, exceeds 10 percent of consolidated revenue: ¥112,903 million (US$689 million) for fiscal 2025, beside NEXON Korea Corporation's ¥318,342 million (US$1,943 million). The same report states that NEOPLE developed Dungeon&Fighter and holds the IP, that it has concluded an exclusive distribution agreement and receives royalties under it, and that licences for PC online games to distributors in China are granted directly by the Korean consolidated subsidiaries that hold the IP. That is not NEOPLE's own statutory account; it is a line inside its parent's filing, at the threshold where the Japanese form begins asking about subsidiaries.

The deck's last page carries a schedule: Q1 2026 results, Thursday, May 14, 2026. What fiscal 2025 put on the record was a product line called royalty, a geography called China, a segment called Korea, and, in the notes, one customer with an amount, a segment, and no name — a full-year disclosure; whether each of those cuts repeats in a quarterly document is not something a schedule page says. When the tables refresh, the reader brings the name.

A note on conversion: all yen amounts in this piece are converted at ¥163.8 = US$1, the rate retrieved from the source below on 24 July 2026, applied uniformly to every period discussed. Dollar figures are rounded to the nearest million — for example, ¥475,102 million ÷ 163.8 = US$2,901 million — or to a tenth of a million where the amount is below ten million dollars; per-share amounts are rounded to the cent. Nexon's published exchange-rate assumptions are quoted as published, unconverted. The conversions are ours, not the company's.